In the most advanced economies, the relationship between business and the authorities is fluid. Combining the private sector’s market vision, quest for efficiency, generation of permanent value, know-how and innovation with the capacity of the public sector to contribute a secure and stable legal, financial and macroeconomic framework, has clearly shown that joint public-private efforts have not just produced good results, but also offer the only way of dealing with the main challenges faced by Mexico. The most pressing challenges include corruption, inequality, injustice and climate change. Addressing these challenges should form part of a new social pact to transform Mexico’s economy and move towards a fairer, more equitable society.
The National Development Plan, promoted by the federal government for this six-year Presidential term, defines three general concepts: justice and rule of law, wellbeing, and economic development, as well as three cross-cutting concepts: gender equality, non-discrimination and inclusion; combatting corruption and improving public governance; and territory and sustainable development. Regarding the economy, the Plan defined the goal of attracting greater foreign investment to Mexico, which, in the last quarter of 2018 dropped 15% compared with the previous year. In order to accomplish the Government’s ambitious goal of attracting between 35 and 40 billion US dollars per year in foreign direct investment, we need to gain the confidence of investors and continue to forge mutually beneficial trade relations with the countries that are Mexico’s largest investors. Government, enterprise and academia share the responsibilities and challenges to make this country an attractive environment for both foreign and national investment.
The first consensus must be the injection of competitiveness into our economy. A competitive, strong environment has been proved to foster innovation, productivity and inclusive growth, key factors for a country’s survival and progress in the 21stcentury. Mexico implemented important structural reforms that create the ideal conditions to attract investment and grow competitiveness and transparency in fundamental sectors. Nevertheless, the reforms have proved to be insufficient and incomplete.
We have gradually been losing competitiveness in comparison with other countries in the world. In 2018, Mexico dropped to 51stposition in the IMD (Institute for Management Development) Competitiveness Ranking, falling a total of 19 places in just five years. The indicator in which Mexico fared worst of all those evaluated in this ranking isgovernment efficiency, which is related to the deterioration of institutional and social systems. Specifically, some of the detrimental factors are growth of the informal economy, high levels of corruption and bribery, lack of transparency, limitations in the legal system, and impunity, among others.
These poor results have been exacerbated by the setbacks in other rankings that measure key factors for competitiveness, such as innovation and talent. The Global Innovation Index of the World Intellectual Property Organization ranked Mexico in a mediocre 58thposition, while the IMD World Talent Index 2018, which evaluates the development of highly-qualified work competencies, ranks Mexico 61stout of 63 economies in the global ranking, just above Mongolia and Venezuela. The country declined in terms of local and foreign talent attraction and preparation, which evaluates the quality of the skills and competencies available in each nation, and remained in the second-last place in this investigation. This gap applies to other countries in the region that also suffered from low levels of investment in education and from human capital flight.
These are, without doubt, the challenges that concern the public sector and the private sector alike, forcing them, urgently, to design a new development model that will strengthen the rule of law and also place it on an equal standing with the robustness of the Mexican economy. The Government is doing the right thing by placing the fight against corruption as the foundation of Mexico's transition towards a more competitive economy that will generate equal opportunities and shared wealth for all. However, the National Development Plan, the economic road map for this presidential term, discussions for which included the participation of entrepreneurs and social actors, must also chart a new economic model based on the expansion of knowledge and innovation, understood as determining factors for entrepreneurship at the national level.
Success stories can be clearly seen in the Asian economies that moved towards this model, such as China, Singapore, Hong Kong and South Korea, countries that forty years ago lagged behind Mexico in development, but have now managed to position themselves as global economic powers. But how did they do it? They concentrated on driving innovation, public-private investment in applied research, and entrepreneurship, seeking to attract and train better talent. Their success is mainly discernable owing to the implementation of a "quadruple helix" approach, i.e., the strategic interaction of four components: the public sector, private initiative, academia and civil society. This model used to be known as the triple helix, which lacked one of the most important actors for development and innovation: the human factor. Countries that support the development of talent and foment innovation, entrepreneurship and the generation of shared value will be the economies that develop the most over the next decade.
In this regard, the common ground shared by the leading open research, innovation and ecosystemsin the world, for example, Silicon Valley or in countries such as Israel, Singapore or Ireland, is close collaboration between universities, entrepreneurs, corporations and the civil sector, providing a center of attraction for the best global talent and, therefore, foreign investment. Therefore, one of the main factors for global economic competitiveness consists of creating intelligent and competitive cities in which technology has been integrated and connects entrepreneurs with global markets and value chains, showcasing cultural wealth and a vibrant community of brilliant minds. Close collaboration between the Government, industry, academia and the civil sector is key to generate a flexible, open and digital perspective that will propel this friendly, sustainable ecosystem towards innovation and omni-entrepreneurship.
Education is a crucial component of models that have generated growth and prosperity at very different rates. Both public policy and private efforts need to do their utmost to foster quality education, by increasing investments in universities, research and development (R&D), entrepreneurship ecosystems and research centers, thereby generating the best talent, which is the top competitive advantage in the world’s leading economies. Talent must be produced within the framework of new competencies that will generate value within industry and provide solutions to complex problems, considering key aspects such as critical thinking, teamwork, collaborative leadership, creativity, emotional intelligence, negotiation skills, decision making, service orientation and cognitive flexibility. This is the only way to progress from a manufacturing-based economy to a creative, enterprising industry that is equipped to meet the challenges that could emerge in the Fourth Industrial Revolution.
Some universities and business schools, such as the Business School of Tecnológico de Monterrey, where I have the privilege of serving as dean, spend years promoting the development of key competencies in our students to prepare them for the new work environments dominated by artificial intelligence, big data, automated learning, biotechnology, nanotechnology and genomics. We need entrepreneurial leaders who are not only innovators with the capacity and creativity to face the challenges that the future has in store for us, but who also exercise an ethical and conscious leadership that considers social impact and aims to generate shared value and transform society.
Some of the Federal Government’s initiatives are on the right track, such as the Youth Building the Future training program, in which the Ministry of Labor and Social Welfare, the private sector, academia and social organizations have partnered to develop the skills of Mexico’s young people, capitalizing on their enormous talent.
The 2030 Agenda, through the 17 Sustainable Development Goals (SDGs), seeks to put an end to poverty, inequality and hunger, achieve gender equality and access for all to decent work, facilitate access to health services and quality education, protect the environment and natural resources, and assure that all people enjoy peace and prosperity. Consolidating the multi-stakeholder approach across the world, and especially in Mexico, is the only way to generate solutions to the current complex challenges.
The Sustainable Development Solutions Network, an effort lead by Universidad Nacional Autónoma de México and Tecnológico de Monterrey to mobilize academia, the private sector privado and society, in collaboration with the public sector, towards fulfilling the Sustainable Development Goals in Mexico, is a concrete model focused on the generation of innovative and sustainable, long-term solutions.
Joint efforts between the government, private initiative, academia and civil society do not mean that everyone will share the same points of view, but they will share a common agenda, with a new vision and a disruptive proposal for our transformation.